At a time when Americans are starting to get into the holiday spirit, Congress has its foot on the gas pedal to pass a significant tax bill by year’s end. AEE supports Congress’ intention to lower the corporate tax rate and adjust the tax code to give certainty to businesses and let them do what they do best – invest, innovate, and create jobs. As a $200 billion industry supporting more than 3 million American workers, the advanced energy industry has much at stake in the sweeping revision of the tax Congress is aiming for. Unfortunately, the bills passed by the House and Senate each include troubling provisions that would undermine Congress’s goal of implementing a pro-growth strategy for the American economy. On Wednesday, AEE submitted its recommendations for the final legislation to congressional leaders.  

Here, in our letter, are the topline messages to Congress from the advanced energy industry:

Harmonize tax code for advanced energy technologies
AEE strongly supports efforts to expand eligibility for the investment tax credit (ITC) to additional advanced energy technologies, including fuel cells, combined heat and power, distributed wind, and geothermal. This provision (included in the House bill) would create a level playing field for the ITC. AEE recommends that the conference include energy storage as an additional eligible technology under this section. Additional provisions can help advanced nuclear reactors and various energy efficiency technologies.

Maintain market certainty for businesses by keeping 2015 energy tax provisions
AEE strongly opposes several provisions that would undermine the gradual phasedown of tax credits for wind and solar. The House-proposed revisions to the PATH Act would take away market certainty for businesses, which Congress purportedly strives to achieve with tax reform, and disrupt billions of dollars in ongoing investments.

Allow for businesses to invest in new credit bonds for energy investments
AEE opposes the House-proposed elimination of the ability to issue new tax credit bonds after December 31, 2017, including Qualified Energy Conservation Bonds (QECBs), Clean Renewable Energy Bonds (CREBs), Qualified Zone Academy Bonds (QZABs) and Qualified School Construction Bonds. States and local governments across the nation use these bonds to funds energy saving and related projects that save their taxpayers’ money.

Maintain the electric vehicle tax credit with the current manufacturer cap
Congress should maintain current law for the electric vehicle market, as the Senate bill does, and not repeal the tax credit for electric vehicles (EV). The EV tax credit already has a built-in phase-out per manufacturer, thus incentivizing investment in an innovative technology and then removing federal support once a manufacturer hits the market share of 200,000 vehicles sold. 

Fix the Base Erosion Anti-Abuse Tax (BEAT) and Alternative Minimum Tax (AMT) provisions
Congress should not undermine tax equity investment in advanced energy technologies. That would be the effect of two provisions in the tax bill passed by the Senate. The Base Erosion Anti-Abuse Tax provision, as currently written, would affect major investors and undermine the tax equity market for renewable energy, also applying this tax retroactively to current projects. This attempt by the Senate to prevent companies from reducing their U.S. tax burden by moving profits offshore unfortunately involves a calculation that could cancel out the value of credits used in financing of wind and solar developments. The current language in the Senate bill for the corporate Alternative Minimum Tax could further hurt tax equity investment in advanced energy. These two provisions would put billions of dollars in private investment at risk, along with the construction and manufacturing jobs that investment supports. 

This is an historic moment in tax policy, equivalent in scope to the 1986 tax bill. It is vital that the tax legislation of 2017 set a foundation for advanced energy growth. We call on Congress to make that happen. 

Read AEE's letter to U.S. Congressional leaders with details on these recommendation for tax legislation.